COSTAR / 08.28.17
Real estate private equity firm Ascentris and its development partner Optima, Inc. have fully stabilized the partnership’s latest multifamily development, the 150-unit 7160 Optima Kierland Apartments at 7160 E. Kierland Blvd. in Scottsdale, AZ, reaching the 95%-leased milestone in just four short months after the project delivered in May.
Optima broke ground on the 10-story, 525,000-square-foot apartment building in February 2016, holding the grand opening of its leasing center and marking the beginning of pre-leasing a year later in February 2017.
“The rapid lease-up of 7160 Optima Kierland, at rental rates in excess of pro-forma, is a testament to the quality and uniqueness of the product that Optima builds,” said Dan Cohen, managing director with Ascentris. “Optima Kierland provides a truly differentiated living experience for its residents, at a location that is second to none in North Scottsdale.”
The joint-venture partnership purchased the site in December 2015, representing the first phase in a proposed three-phase, master-planned development on nine acres in the Desert Horizon Park / Cactus Road MF submarket of Maricopa County. Immediately adjacent to the rental property is 7120 Optima Kierland, a 12-story, 220-unit luxury condominium property owned by another partnership between Optima and Ascentris that broke ground in early 2017. With initial units slated for delivery in the first quarter of 2018, the condos are already 70% pre-sold.
7160 Optima Kierland represents the height of luxury for-lease apartments in Scottsdale’s burgeoning multifamily market. The property offers a full-service fitness center, rooftop pool and sauna, basketball courts and media center. The rooftop pool features an elevated, negative-edge deck that allows for some of the best unobstructed views in North Scottsdale. Tenants can enjoy numerous upscale amenities and interior finishes as well as a glass facade and oversized balconies with hanging gardens. Ascentris reports the property commands some of the highest rental rates in the greater Phoenix market.
“Optima Kierland is ideally situated at the confluence of Scottsdale Airpark’s most prized neighborhood amenities, including high-end shopping centers, golf courses, resorts and spas, many of which are within walking distance. Demand for luxury living in close proximity to these amenities is apparent – the 5 Star, 150-unit asset stabilized within four months of delivery, commanding rents that nearly doubled the submarket average with no concessions,” said Michael Petrivelli, a market analyst with CoStar Market Analytics who covers the greater Phoenix region.
“The city of Scottsdale is widely known as the most affluent area in the metro, therefore it is no surprise that virtually all deliveries in the Scottsdale Airpark submarket have been of the 4 & 5-Star quality this cycle. A modern architectural design and an abundance of health and wellness amenities are among the many high-end distinctions that set Optima apart from nearby competitors,” he noted.
Nearly all deliveries from 2014-2016 leased up at a steady pace, but the average rent for these properties was roughly 65 percent less than those at Optima Kierland, according to Petrivelli. Two 4-Star projects recently completed down the street from Optima Kierland, however, this asset’s 5-Star designation allows it to command rents that are around 45 percent higher, on average, than those two 4-Star projects.